Mr LAURIE FERGUSON (12:05 PM) —I wish to briefly deal with two aspects of the Taxation Laws Amendment Bill (No. 7) 1997. The first one relates to the savings rebate. As I was rushing out the door I heard the previous speaker, the honourable member for Boothby (Dr Southcott), refer to figures. From recollection, he said that 79 per cent of those affected were either previously low income people or people on benefits. The fact of life is that you can try to manipulate statistics in any fashion. It is not a question of whether 79 per cent of the money involved comes from that field; it is a question of how many are helped.

Obviously, given the numbers, the vast majority of the amounts involved will be related to those people. Nearly 80 per cent of the money that is covered by this rebate comes from that sector of the population and that has to be interrelated with the number of people that theoretically could benefit throughout the country. Similarly, the other figures that were cited have to be looked at in that context as well.

The savings rebate is a very firm repudiation of the government's commitment of 2 November when the Treasurer (Mr Costello) said that they were going to continue to implement the co-contribution. This is the biggest let-out clause that he gave himself and, if you were extremely kind to him, you can see the broad possibility that he might be trying to diminish the commitment:

We reserve the right to vary the mechanism to provide the most effective and equitable delivery. . .

That is what he said. He said that they reserve the right to bring the co-contribution in in a different fashion, to do it in a different style and manner. If you are very kind to him, you could say that he might have been saying that there was going to be a different mechanism. As we all know, in retrospect, the government basically threw it out the backdoor and abolished it totally.

For all the talk about l-a-w, et cetera back in ancient history, in the here and now of who is in government in this country and in observing what is going on in Australia today, the clear reality is that this government has broken a very firm commitment in regard to the co-contribution. This essentially will do very little for savings in Australia. I think we all know that this has been a long-term problem over a variety of governments. Over many decades the level of national savings has been low. This measure will make no effort or contribution towards savings whatsoever.

Previous speakers have alluded to it becoming virtually a requirement or stipulation to be involved in trusts before you can enter the ministry or cabinet in this country. It is very interesting that this savings rebate is essentially going to help those people involved in family trusts. When the government speculates about the possibility that they might do something about family trusts, one has to have grave doubts about whether they really have any intention of doing anything about those loopholes when we see that as many as 10 ministers involved in family trusts could all benefit by as much as $450 a year due to the fact that 15 per cent of tax that would normally be payable, up to $3,000, will go to those people.

So the savings rebate is a very firm indication that the government has not kept its commitments. It is a measure that will not do anything for national savings. It will not help us reduce the interest payments we have to make overseas. It will not allow us to marshal significant amounts of money for national infrastructure projects to do the things that this country needs to do. Essentially, it will help those people on unearned incomes benefit at the expense of those people who, up to now, were receiving a co-contribution towards superannuation and their retirement income.

The other aspect of the legislation I want to deal with is the measure to supposedly widen choice in this country. I heard the member for Lowe (Mr Zammit) speak a few moments ago. If there is any person here who has been on the other side of politics who has had a long-term interest in small business it is that member. I think even his greatest detractors would say that he has had the ear of small business, that he has always raised a significant number of measures in regard to taxation and labour market issues that have come from that sector. You heard what he said. He has small businesses in his electorate—and I guess he is a conduit for a lot of people outside his electorate as well—and he said that small business does not think this is the greatest thing since sliced bread. Small business does question whether or not it is worth while.

We have a government that talks about reducing red tape, helping small business. We have a government that keeps harping about the fact that small business is the major source of jobs in this country. We have a government that alleges we have to make sure we can sack people a lot more easily and give them no chance of having a day in court when they are sacked by employers. We have a government that says that we have to do all these things because small business is so desperate. Small business is supposedly going to hire hundreds of thousands of people if they have the right to sack people more easily and to deprive people of the right to try to get their jobs back.

This same government, with all their rhetoric, all their polemics about how they are trying to help small business, is bringing forward in this legislation a number of restrictions on small business by making it more difficult for them to operate, by bringing in more red tape. We really have to question what this is all about. It is not about choice. I again refer to the member for Lowe's contribution. As an Independent member of this House, he does not have an axe to grind on behalf of the government or opposition and he, like me, represents an electorate with a very significant NESB population.

The point he makes is quite true: many people in this country have difficulties reading the newspapers let alone trying to have an informed choice in regard to superannuation and their long-term income interests. There will be minimal education. I think the figure was $12 million over the next four years will be spent on both administration and education—not just education but the entire administration of this process. To accomplish both administration and education in 1997-98, less than $2 million will be spent on an education campaign.

People are being hit with a new problem. Most of them have not had previous experience of it. They do not know much about it. Quite frankly, three-quarters of the federal parliament would know very little about the intricacies of superannuation that confront these people. It is not only people from NESB backgrounds who are affected by this government's attack on the Adult Migrant English Service and the government's attempt to deprive people of English instruction and education but also those people who have worked for decades in this country at a time when English was not required for them to do jobs such as being factory hands, digging roads and working at James Hardy and in the asbestos industry. It is those people, as well as Anglo-Saxon Australians who do not have literacy and numeracy skills, who are affected.

The government are saying that on 1 July one group of people, and a year or two later another group of people, will be confronted with a requirement to make a choice. It is quite evident that there is very little preparation and very little real interest by this government in ensuring that that choice will be based on information and knowledge.

Previous speakers have quite correctly made the point that there is also a very grave concern that we will have a repetition of what occurred in the United Kingdom when the Thatcher government, once again driven by ideological needs rather than an analysis of what happens and what is beneficial, decided to facilitate supposed competition. Essentially, people, selling on commission, went out in the marketplace and exploited people who had little or no knowledge and persuaded them against their very obvious interests to go into schemes. As many as half a million people changed over and many of those people made very dubious choices. You can read in the British newspapers, even in the Guardian last week, references to the huge amounts of money, billions of dollars, that were involved and the losses that people made.

As I said, we do not just have the question of the information people have. The kind of parallel we have here is that of the doctor versus the patient, or the migration agent versus the person who is fearful of being kicked out of Australia and goes to that person for advice regarding migration matters. That is the kind of parallel we have here; that is the inequity between the two parties—an employer essentially putting up this proposition to the employee, and that employee having very little knowledge of the alternatives, and very little real choice.

This is clearly an attempt to reduce the power in the marketplace, to reduce the presence of industry funds which have a connection with the trade union movement. They would hope that they would be undermined by people withdrawing from them over the next few years, and that is clearly what is driving this. It is not going to do anything for the people that it supposedly seeks to help.

The member for Wills (Mr Kelvin Thomson) referred to views by the Heritage Foundation in the United States—a well-known, arch-conservative brains trust—that the current Australian scheme has a lot to say for itself and that it should be looked at by the United States and others. He said that it is not really an organisation that would tend to be associated with the Labor Party side of politics. It is quite fascinating that, in the course of this debate, a conservative member mentioned the Heritage Foundation on other fronts. If they are saying that there are very major beneficial aspects of the Australian system, perhaps we should sit up and listen.

Labor says that there should be a more comprehensive education process, that the starting date for choice should not be until 1 July 2000 for both new and existing employees, that default funds should contain specific investment choice and that there should be insurance cover features to protect those employees who do not make an active choice from winding up in an inappropriate fund.

Labor also says that commission based sales of products should be outlawed. I have referred to the phenomenon that has occurred in the United Kingdom. We also say that clause 32V, which overrides industrial awards, should be removed and that the definition of `industry based fund' should be redefined to include the requirement that such funds operate on a not-for-profit basis. Once again, we are opposed to this government's intention to, in another way, undermine industry funds by widening the definition so that every Tom, Dick and Harry can get into the operation.

In regard to superannuation, we have seen that this is part of a wider pattern. In the last day or so, the government has put forward legislation to take an independent umpire out of superannuation matters. Once again, what is needed in this field is someone who can decide when there are disputes, in a very unequal contest between employers and employees. The other superannuation measure will deprive a large number of people—casuals, people earning less than $450 a month—from making any superannuation contribution whatsoever.

In summing up, this legislation is not about choice, it is not about helping employees, it is not about doing anything for Australian savings, it is not about helping the person in the street. It is essentially driven by a determination to make sure that there are not industry funds in this country which might, hopefully, be more inclined to do things in regard to the national infrastructure than funds driven by other concepts.

This is about ideology; it is about a determination to replace those funds. It will increase costs to the funds in regard to advertising, getting out in the marketplace and competing, and defending their section of the market from predatory moves by other funds. It will increase administration costs. Small businesses will have much larger costs because of transferring people every which-way.

As was said earlier, people in this country change their jobs more often now. The career path for people staying in jobs for 20 to 30 years is no longer there. This government, I must concede, has played a very decisive role in increasing insecurity in industry in this country, making it easier for employers to facilitate terminations, making it easier for people to be retrenched. More and more people will have the need to change funds. These days, the average Australian moves house 17 times. Once again, that is going to have an impact.

This legislation should be condemned. The Labor amendments go towards making sure that people have a real choice in regard to what they do—not a fake choice based on ideology.